GTL Summary:

This Ministerial Resolution constitutes the Executive Bylaws for the KSA Income Tax Law, providing detailed implementation rules. The provided text, specifically Article 41, originally set out the precise methodology for calculating annual cash flows for natural gas investments. The calculation began with the Natural Gas Investment Tax Base, to which non-cash items like depreciation, amortisation, and financing costs were added. Deductions included capital cash expenditures and income tax paid to the Government. It is critical to note that Article 41 was subsequently deleted by Ministerial Resolution No. 2568 of 2019, rendering this specific provision obsolete.

Document Type: ERS - Executive Regulations
Law: Income Tax Law (Royal Decree No M/1 - 21 Feb 2004)
Decision Number: executive-regulations-1535-article-41
Year: 2019
Country: 🇸🇦 KSA
Official Name: Article 41 - Repealed
Last updated at: 2026-01-05 08:39:39 UTC

Footnotes

[31]Deleted by Ministerial Resolution No 2568 dated 5/9/1440H (10/05/2019). Prior to deletion, Article 41 read as follows:

The annual cash flows for the natural gas investment shall be calculated as follows:

The Natural Gas Investment Tax Base, to which the following shall be added:

  1. Net operating losses carried forward for tax purposes which were deducted to calculate the Natural Gas Investment Tax Base.

  2. Non-cash items that have been deducted in calculating the Natural Gas Investment Tax Base, such as:

    1. Depreciation and amortization of capitalised fixed assets and intangible capitalised assets.

    2. Amortization of capitalised expenditure of deductible pre-operating expenses.

    3. Deductions resulting from amortization of prepaid amounts for future services related to plants, pipelines, etc.

  3. Financing costs and related banking fees.

The following shall be deducted from the gross:

  1. Capital cash expenditure regardless of their source of financing, such as:

    • Addition of fixed assets..

    • Other additions to intangible assets during the fiscal year.

    • Pre-paid expenditure for future services related to plants and/or pipelines, etc.

    • Deductible pre-operating capitalized costs.

      Capitalized financing fees, any other capitalized banking service fees or any other capital expenditure unrelated to natural gas investment activities such as purchase of shares, bonds or similar instruments, shall not be deducted.

  2. Natural gas investment tax and income tax paid to the Government of the Kingdom of Saudi Arabia during the fiscal year, excluding fines resulting therefrom and taxes and fines paid on behalf of other parties. The resultant represents the annual cash flows.

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